Southwestern Energy Company

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy's first quarter 2021 earnings call. Management will open up the call for a question and answer session following the prepared remarks. In the interest of time, please limit yourself to two questions and re-queue for additional questions. This call is being recorded. I would now like to turn the conference over to Brittany Rayford, Southwestern Energy's Director of Investor Relations. You may begin.

Thank you, Andrea. Good morning, and welcome to Southwestern Energy's first quarter 2021 earnings call. Joining me today are Bill Way, President and Chief Executive Officer, Clay Carroll, Chief Operating Officer, Michael Hancock, Interim Chief Financial Officer, and Jason Kurtz, Head of Marketing and Transportation. Before we get started, I'd like to point out that many of the comments we make during this call are forward-looking statements that involve risk and uncertainties affecting outcomes. Many of these are beyond our control and are discussed in more detail in the risk factors in the forward-looking statements section of our annual report and quarterly filings with the Securities and Exchange Commission. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance, and actual results on developments may differ materially, and we are under no obligation to update them. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with periods. For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release available on our website. I will now turn the call over to Bill Way.

Thank you, Brittany, and good morning, everyone. We appreciate you joining us today, and I hope that all of you are safe and well. Southwestern Energy's returns-driven strategy focuses on creating sustainable value, protecting financial strength, consistently delivering leading operating and financial results, and pursuing opportunities to capture the benefits of increasing scale. We made solid gains on our 2021 plan this quarter. The business generated $88 million in free cash flow and paid down debt, as promised. We delivered production within guidance from our maintenance capital program, further lowered total cost, including well cost, and delivered drilling and completions achievements, all while remaining financially disciplined. The continuous efforts to optimize our business performance are clearly evident in this first quarter results. Postage price realizations increased 18% compared to the first quarter of 2020, while our cash flow is up 85%, highlighting another benefit of increased scale and improving performance across the enterprise. The broader market dynamics have materially improved, and fundamentals for all commodities are indicating support for higher prices. Except for the record-setting weather in February, the U.S. experienced a relatively mild winter, yet natural gas storage balances remain near the five-year average, driven by decreased natural gas supply and strong export demand. In fact, LNG gas recently reached new highs of nearly 12 BCF per day, and exports to Mexico have topped 6 BCF per day. The 2021 WTI strip price has improved over $8 per barrel since we set our guidance in February. with transportation demand improving and OPEC Plus compliance shaping supply increases to better match demand recovery. The NGL landscape also remains promising with low propane storage levels and increased global demand for both ethane and propane. We've positioned the company to take advantage of these supportive market fundamentals to capture additional value and greater free cash flow. So why invest in SWIN? We think it's very straightforward. As I said earlier, the company is expected to generate meaningful free cash flow directed to debt reduction. We've got a strong balance sheet with ample liquidity and a leading debt maturity runway. Our Tier 1 assets across almost 800,000 acres in West Virginia, Pennsylvania, and Ohio are expected to produce more than 1 trillion cubic feet of clean natural gas and base in leading liquids production this year. These assets offer flexibility from a diverse commodity profile, including prolific dry gas wells, and the highest condensate yield acreage in the Appalachian Basin. We consistently exercise discipline in our capital allocation, investing in the highest return projects across our high-quality inventory that meet our rigorous internal hurdles. We're a cost-focused operator with top quartile well costs, and we have realized broad reductions across all expense categories. Our differentiated operating capabilities are consistently demonstrated by our highly talented people operating company-owned drilling rigs, frack fleet, and extensive water pipeline networks. Our production is marketed through a diverse and right-sized transportation portfolio with access to premium markets. And foundational to all of this, Southwestern Energy is also recognized for ESG leadership. Many of today's ESG headlines are, in fact, past achievements for SWIN, including low GHG emissions and methane intensity, transparent chemical management and disclosure, responsible land use, water conservation, and leading corporate governance standards. For example, we continue to join with local and state stakeholders to always replace more fresh water back into the aquifers than we consume in our operations in the areas where we work. We've replaced more than 14 billion gallons of fresh water to date. We demonstrated our commitment to the importance of ESG by adding methane intensity to our corporate compensation scorecard and increase the overall weighting on the scorecard of ESG-related metrics. Each day, we take steps to strengthen our social license to operate by committing ourselves to a higher standard of care for our employees, our communities, and the environment. As we've done for years, we'll continue to progress our ESG efforts through actions that make a meaningful impact for our stakeholders, including the communities in which we're proud to work and live. And later this year, we'll publish our eighth annual corporate responsibility report, which will provide a comprehensive view of the company's efforts and achievements. Remaining at the core of our value proposition is a commitment to the right people doing the right things. Our success depends on the alignment of a fully engaged, diverse, and inclusive workforce nurtured by our high performing value driven culture. So as you can see, there's plenty of proof points supporting SWIN's value proposition for shareholders. Now, to get in a little more detail, I'd like to turn over the call to Clay to discuss some specific operating achievements in the quarter.